Toyota Dealers: We Prefer Hybrids over Electric Vehicles!

In a rather surprising stance against electric vehicles, a poll recently indicated that most Toyota dealers (85% to be exact) agreed with Toyota’s decision to pull the plug on the all-electric Scion iQ, just a week before its debut at the Paris Auto Show. Toyota’s reasoning for this was that electric cars “do not meet society’s needs”.

Now, I can see their point…at the present, electric vehicles do not have the same range as their petrol counterparts, nor are there convenient recharging stations. Not to mention the fact that most people aren’t able to afford the recharging station at home (yes, I’m aware that if you can afford the car, you should be able to afford the recharging station…but electric cars are still priced out of most people’s budgets: otherwise, they would sell more). On top of all of that, our grid infrastructure can barely handle the current demand for homes, buildings, etc., let alone a fleet of vehicles that would rival the road going combustion engine ones today.

In any event, over 70 percent of those that oppose all-electric vehicles stated that current hybrid vehicles would be able to fulfill the needs of customers wishing to own an alternative-fueled vehicle, and the other 15 percent stated that plug-in hybrids like the Toyota Prius Plug-In would satisfy their customers. Finally, 15 percent of those polled feel as though hydrogen-powered vehicles are the future of the industry. Speaking from my professional and personal experience, I concur with them. We will (maybe not in my lifetime) all be driving hydrogen vehicles. In fact, Honda currently has the FCX Clarity vehicle out now for lease in California.

The reasons why dealers oppose electric vehicles are the same reasons why dealers oppose anything outside of the norm…because they hate change. If it were up to them, they would still be throwing keys up on the roof of the dealership and charging 24% interest to even the most internet-savvy customers. There’s a lot of old-school sales guys now running dealerships all across America, and they only care about one thing…the bottom line. How many units have they sold today, this week, and especially this month.

Hybrid cars sell, and the Toyota Prius is the top dog of them all. Almost every single hybrid car has been influenced in some way, shape, or form by the Prius, from certain technologies, to outright design imitations (Honda Insight). Of course, the “reason” why is in the name of achieving the greatest amount of efficiency by way of aerodynamics, but with vehicles like the Ford C-Max showing that a vehicle can look somewhat normal and achieve 47 MPG in combined driving (EPA estimates, your mileage may vary), anything’s possible. That being said, customers love that the Prius family has its own unique look to it, because it is easily distinguishable as a hybrid to other people.

Not only do hybrids sell more, but they command greater profit margins as well. The Toyota Prius is generally not marked down, and in times of gas prices commanding a higher premium, may even enjoy a “market adjustment” (dealer speak for a dealer markup). It’s interesting that a vehicle in its third generation can still command a dealer markup in this day and age.

Electric vehicles tend to sell slower, and the profit margins are smaller. The biggest discount is the (up to) $7,500 tax credit that only the consumer enjoys. This combination of factors is very unappealing to dealers…they want the quickest selling product that commands the highest amount of profits. That is why Toyota, along with Nissan, Ford, GM, and Dodge, all stock and promote trucks aggressively. Cheap to build and easy to sell for lots of money.

On top of all of that, there is the enormous amount of training that goes on with selling any type of vehicle. If you can imagine the dizzying array of vehicles, options, and trim levels…now imagine trying to not only memorising all of that, but actually being able to translate that into useful information for the buying consumer. And that’s just for normal vehicles…now you have hybrids, plug-ins, hydrogen, and fully electric vehicles. Even though the Toyota RAV4 EV is slowly trickling into dealerships in California now, most don’t (and won’t) have one on hand to demonstrate and sell to the buying public. Most aren’t interested in lobbying for one either.

Will electric vehicles be the solution for consumers, automakers, and dealers alike, or are they a stopgap until hydrogen vehicles come online, complete with the fueling infrastructure that rivals the convenience of the fossil fuels? Only time will time, but like all things, the market will dictate what the automakers produce.